It looks like the cybersecurity sector has taken off like a rocket once again. There could be another 25% to 50% in it this year. The near destruction of Sony (SNE) by North Korean hackers has certainly put the fear of God into corporate America. Apparently, they have no sense of humor whatsoever north of the 38th parallel. As a result, there is a generational upgrade in cybersecurity underway, with many potential targets boosting spending by multiples.

It's not often that I get a stock recommendation from an army general. That is exactly what happened the other day when I was speaking to a three-star about the long-term implications of the Iran peace deal. He argued persuasively that the world will probably never again see large-scale armies fielded by major industrial nations. Wars of the future will be fought online, as they have been silently and invisibly over the past 15 years.

All of those trillions of dollars spent on big-ticket, heavy metal weapons systems are pure pork designed by politicians to buy voters in marginal swing states. The money would be far better spent where it is most needed, on the cyber warfare front. Needless to say, my friend shall remain anonymous. The problem is that when wars become cheaper, you fight more of them, as is the case with online combat.

You probably don't know this, but during the Bush administration, the Chinese military downloaded the entire contents of the Pentagon's mainframe computers at least seven times. This was a neat trick because these computers were in stand-alone, siloed, electromagnetically shielded facilities not connected to the Internet in any way. In the process, they obtained the designs of all of our most advanced weapons systems, including our best nukes. What have they done with this top-secret information? Absolutely nothing.

Like many in senior levels of the U.S. military, the Chinese have concluded that these weapons are a useless waste of valuable resources. Far better value for money are more hackers, coders, and servers, which the Chinese have pursued with a vengeance. You have seen this in the substantial tightening up of the Chinese Internet through the deployment of the Great Firewall, which blocks local access to most foreign websites.